Gold ETF Inflows Hit A 16-month High In August 2023 Due To USA Interest Rates Increase

Gold ETF: An investment of Rs 1,028 crore has come in Gold ETF i.e. Exchange Traded Fund in August, which has become its 16-month high. According to the data of Association of Mutual Funds in India (AMFI), with this the flow in this category on annual basis has exceeded Rs 1,400 crore. Earlier in April, 2022, due to the Russia-Ukraine war, an investment of Rs 1,100 crore was made in this category, which was the highest investment in gold ETFs in any month last year also. Gold ETFs have seen the highest monthly inflows in August 2023 since April 2022.

What is the reason?

As interest rates continue to rise in America, investment in gold ETFs has reached Rs 1,028 crore in August, which is a record high of 16 months. The increase in interest rates in America has seen an impact on the pace of economic growth, due to which an increase in the number of people investing in gold ETFs has been seen. Investment in gold ETFs is increasing because due to continuous increase in interest rates in America, the risk to the dollar has increased and investors are getting attracted towards gold.

The number of folios also increased

Apart from the flow in Gold ETF in August 2023, an increase in its asset base and number of investor accounts (folios) has also been recorded. According to the data, an investment of Rs 1028 crore was seen in Gold ETFs in August. Earlier in July, it had received investment of Rs 456 crore.

Withdrawals were happening in Gold ETF for three consecutive quarters

Earlier, gold ETFs had seen inflows of Rs 298 crore during the April-June period after three consecutive quarters of selloff. Withdrawals of Rs 1243 crore have been seen from this category in the March quarter, Rs 320 crore in the December quarter and Rs 165 crore in the September quarter.

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